Preparing Your Elevator Business for a Successful Exit | Jessica Hellman
Today’s guest is Jessica Hellman, a business advisor specializing in mergers and acquisitions with Lift Business Advisors, Inc. With a background in applied mathematics and data analysis, Jessica has helped business owners understand what drives value, growth, and successful transitions. In this episode, we discuss private equity, business valuation, trust, and the steps owners can take today to build a stronger company.
Chapters:
- 00:00 Intro
- 01:17 Jessica’s Background
- 02:32 Transitioning into the Elevator Industry
- 06:00 Elevator Business Dynamics
- 08:04 Implementing Change in the Business
- 11:46 People and Relationships: Make or Break the Business
- 14:54 Private Equity and Market Trends
- 20:29 Valuation and Business Saleability
- 22:51 Challenges in Mergers and Acquisitions
- 28:02 Getting into M&A
- 29:39 Advice for Elevator Business Owners
- 32:08 Outro
Transcript:
Jessica (00:00)
We don’t necessarily want to think about the end, right? But the reality is the business will transfer, right? We’re not going to be around forever. You’re not going to be able to run business forever. know, the business will transfer to someone. And if you wait until something happens, like, you’re burnt out, there’s family issues, whatever else that forces your decision to sell, then you’re not necessarily going to get the
best outcomes. Most times the best outcomes come from years of focusing on improving the saleability and the transferability of the business.
Matt Allred (00:34)
Hello and welcome to the Elevator Careers Podcast, sponsored by the Allred Group. I am your host, Matt Allred.
Matt Allred (00:42)
Does your workforce need a lift? At the Allred Group, we are committed to connecting your company with top talent that matches your need. Give us a call at 404-890-0445.
Matt Allred (00:55)
Today’s guest is Jessica Hellman, a business advisor specializing in mergers and acquisitions with Lyft Advisors Inc. With a background in applied mathematics and data Jessica has business understand what drives value, and successful transitions. In this episode, we discuss private equity, valuation, trust, and the steps owners can build a stronger company.
Matt Allred (01:17)
Jessica, welcome to the show.
Jessica (01:19)
Thanks Matt, thanks for having me.
Matt Allred (01:21)
No, I appreciate you being here. your at the last NAAC conference in Long Beach and talking with you a little bit about what you do and what you were talking about. Not only is it fascinating to me, I thought it’d be fun to have you here. Even though I think you’d rather cuddle up with a spreadsheet than do this, I appreciate you being here.
Jessica (01:41)
Yeah, that’s right. I am, you know, 100 % introvert, right? I would, I would rather be dealing with spreadsheets than, you know, doing something like this or even speaking, you know, that was, that was very, very difficult for me. I stressed out about that for a long time before, but, you know, ultimately went, it went well. So I’m hoping to kind of take that confidence into the next one and, and, and to this, and to this as well. Yeah.
Matt Allred (02:10)
Yeah, absolutely.
Well, you’re not the only one that gets nervous, honestly. I get nervous a little bit myself. And honestly, when I was interviewed for my own podcast last fall on our 100th episode, I realized that, oh, this is a little bit harder than I realized, right? It’s easy to ask the questions, but it’s a little harder to be on the hot seat. So you’re not the only one.
So you told me you didn’t really start in the industry. You started in applied math and data analysis, which makes total sense. What kind of pulled you into elevators?
Jessica (02:41)
Yeah, so I mean, I did not start in the elevator industry. My background is in math. have you know, master’s in applied math. And my first job out of was at a company called Urban Science.
I won’t get into too many details about what they do, but they’re focused in the automotive sector, a lot of marketing. My role there was in supporting some of their expert witnesses, right?
building testimony, litigation related analysis. So, when I was there, really, really heavy focus on data, data analysis, on building a story that the experts could take to court. And overall, a really, it was a really great company, really great experience. I worked with a lot of really great people there. But my brother,
Matt Allred (03:07)
Gotcha.
Jessica (03:27)
right, who is an engineering major. He worked at a few elevator businesses, Otis, Millar and Schindler off and starting his own business along with three other partners, right? That was City Elevator in New York. They grew that business to be pretty big, know, over a thousand units on maintenance,
750,000 or so in monthly maintenance revenue. So it was a good size business. He, along with three partners, and I, you know,
if you’ve got partners, I think you understand this, or even, it applies to, spouses, right? Sometimes things are difficult. It doesn’t always go at like you planned, right? And so, his goal was to
Matt Allred (04:06)
Sure. Sure.
Jessica (04:12)
you know, to get an investor
in to help buy out some of the partners and continue on with the business. And, you know, he really started building a team. He brought in a lot of really good people, a lot of really experienced folks, names that are recognized kind of in the New York market, right. But he needed someone kind of on the analysis
right. He wanted to professionalize some things. He wanted to
Matt Allred (04:36)
Well, especially if he’s gonna sell, right? He needed a different set of eyes that would be really looking at it like your expertise is analysis, right? So somebody who’s gonna be analytical and not just, I guess the other side of that would be kind of emotionally involved to the point, no, no, this is worth X million dollars analyst is saying, no, look at the numbers.
Jessica (04:47)
Right.
Yeah, no, and that’s absolutely true. That’s definitely something
comes up a lot in M &A. I’m sure we’ll talk about kind of as we go along. yeah, a while I said, I’m kind of doing my own thing. Like I’m not 100%, don’t know about elevators, but eventually
Matt Allred (05:16)
Sure.
Jessica (05:20)
like you’re saying, with the goal of let’s put some things in place so that
sells.
Matt Allred (05:25)
What
motivated you to go that way? Because it sounds like it’s very foreign, very different, and depending on how much you like your brother, that can be really risky. ⁓
Jessica (05:35)
I think that’s the thing, right? There’s some level of loyalty there, And trust, right? I trusted him enough in order to do it. really what it is. So, I mean, not planned for sure. I did not,
Matt Allred (05:44)
Sure, sure.
Jessica (05:50)
at any point that I wanted to get into the elevator industry, But I mean, once I got here, I was like, wow, this is pretty great, you know?
Matt Allred (06:00)
What surprised
you the most about showing up? mean, obviously you had expectations, you’d heard some things from him, once you kind of walked in there, what was the biggest surprise for you?
Jessica (06:10)
Yeah, I mean, think, well, a couple of things I would say, You know, there was more overlap than I would have expected from the automotive industry, if you can believe that, right? There
you know, if you think about like an auto dealer, right? And this comes from the, my experience at Urban Science, Those dealers are not in the market.
Matt Allred (06:24)
Mm-hmm.
Jessica (06:30)
to necessarily sell new vehicles, right? They sell new vehicles as a way to get warranty work, to get service
Matt Allred (06:38)
Okay,
Jessica (06:40)
a lot of carrying costs on a new car and they don’t make a lot of money on it, right? And then you get the maintenance afterwards, right? So it’s a very similar thing. And I really didn’t expect that, but it was kind of a unique…
Matt Allred (06:43)
So you sell them at cost and then you get the maintenance is what I’m hearing.
Jessica (06:56)
unique thing.
would say the relationships, the strength of the relationships, the importance of the relationships is also something like kind of same but a little bit different as
I mean, coming in, coming into the business as the sister,
Matt Allred (07:16)
Sure.
Jessica (07:17)
There were, I not high expectations of what I was going to bring, This is like people thinking, okay, well, somebody else taking up a chair, you know.
Matt Allred (07:29)
Well, and the question,
she’s not gonna turn wrenches. What value is there in sitting behind a desk and working on a computer? And maybe just not understanding what’s even possible.
Jessica (07:40)
Right, right. And I mean, coming in there, you know, as the kind of as the sister with I think, low expectations, I really wanted to, prove those those folks wrong, right. And the fact that there was some overlap, you know, when I got there, I was I was thinking like, Okay, yeah, there, there is value I can add here, I can I can immediately start tackling these things.
Matt Allred (08:03)
Very cool. How long did it take just for them to start to see, she actually is bringing back.
Jessica (08:09)
Well, I think for the first few months, I didn’t have a desk, right? So I sat in a corner, right? I’m not sure that anybody knew what I was there for, what I was doing. So, you know, once I was able to like get out meet folks and really start digging into some of the projects I was doing and, you know,
Matt Allred (08:15)
Tricky.
Right.
Jessica (08:31)
making suggestions about how we should do things, I think, you know, it turned around. I mean, at the same time, you know, I was asking people to do things different than what they had normally done, right? You know, as a part of this process and, implementing the service plan and trying to make some processes more…
professional, right? It required a certain level of change. So I wouldn’t necessarily say that I made a ton of friends immediately, right? you know, that built over time, for sure.
Matt Allred (09:07)
Yeah,
yeah. Yeah. And especially if you’re trying to help or better to find a maintenance program or billing or margins or there’s some discipline in there that may not be fun if you’re used to just kind of, this is just how we do things and why do I have log this? Why do I have to return my tickets? Why do have to follow this process? That can be really uncomfortable for somebody who’s just maybe not disciplined enough to…
to do it or care.
Jessica (09:34)
Yeah. Yeah, exactly. but I mean, the reality, like on the, you know, on the operation side is that everyone really is part of the process, and the team, right.
you know, being able to fix elevators is, is the most important part, right. But all of it together combined, is what makes it successful. You know, one of the projects that I worked on
at the very beginning was
a dedicated service solution. The goal was let’s get every single maintenance contract up at, you know, 35 % gross margin, which high that, you required only working with the service to make sure task lists are correct, dispatch is correct.
right? But then you’re working with sales in order to understand what contracts say, what they should say. and
I mean, that one project touched so many different departments, right? In the business that, you know, it just, it really is amazing, I think, in our industry, how tight the team needs to be in order for everyone to be successful. You know what I mean?
Matt Allred (10:30)
Yeah, everybody.
Absolutely.
Yeah, well, and you’ve kind of hit a couple things there. guess one question I want to ask is, were bringing some transferable knowledge skills other, other job.
were there some things that were unique to elevators that actually make them not just run well, but it’s one thing to run well, but it’s another thing able to convey that to a potential investor, right? They have to be able to see So, and if you can’t,
prove it, then it’s not there. Anyway, that’s a convoluted question for you.
Jessica (11:12)
Well, I mean, I think,
know, we talked a little bit about the relationships that, know, definitely one of the things I was working on was like, how do we quantify these things in order to, know, to position the business correctly to point out all of the important parts, right? The recurring revenue, the contracts and, all of those things, a lot of which
is I do now at, business advisors, right. And in selling, in working through transactions and, in valuations, right. So
there, that was a, that was a big, a big part of it for sure. Yeah.
Matt Allred (11:46)
Yeah, yeah. How much, I mean, obviously you saw partner dynamics. You mentioned that kind of at the right at the beginning, right? So you saw some internal challenges. How much would you say people and relationships impact success or failure of the business?
Jessica (12:00)
I think this is key, right? Having worked on the operations side, mean, a lot of relationship driven. Elevators are no different, but I
the difference with companies is that there’s a ton of pressure all the time, You’ve got…
service issues and and then you’ve got you know, demanding customers that don’t want to pay in a reasonable amount of time, you know, making payroll, running around trying to get checks. There’s a a ton of pressure every day. you know, the…
the relationships then, you know, if they’re not strong, kind of the smaller things I think become much, much bigger, right? So you’ve really got to have a level
trust. think I’ve said trust, that might be the theme of my podcast, is trust,
Matt Allred (12:48)
Yeah, yeah.
Jessica (12:51)
There’s got to be a strong level of trust between, employer and employees in order to handle that level of pressure.
the same lesson also applies in Mergers & Acquisitions, right? When it comes to trust, I a deal doesn’t happen, if it breaks down for any reason, you know, it’s often because
a lack of of trust from you know, one side or the other, whether it’s buyer and seller or buyer and advisor. is the key.
Matt Allred (13:21)
Yeah, absolutely. Well, and especially if you’re there, kind of on a long term and things are changing and people aren’t liking it. It’s I trust that she’s trying to move this in the same direction I am or not? you know, are the owners trying to take it in a direction that may not work out well for, you know, somebody else, right? Because everybody’s kind of got their own interests at heart and want to make sure that they’re moving in a direction that’s going to work for them.
Jessica (13:45)
Yes. Yeah. And that can be, you know, very scary around, you know, transaction. A lot of times, circle of trust rate is very small, right? Because don’t necessarily want people deciding that something is good or bad
Matt Allred (13:53)
Mm-hmm.
Jessica (13:59)
for them. Like I have never worked with a seller that did not have their employees best interests in mind, like never.
It always comes up like I want to make sure my employees are taken care of, right? But, you know, folks are scared. This is their, that’s their livelihood, right? And they don’t want to, necessarily have you know, change jobs or, or whatever. But yeah,
the sellers that we’ve worked always been, on
good outcomes for the employees
Matt Allred (14:30)
Yeah, yeah, thank you,
Matt Allred (14:31)
Hey there listeners, it’s Matt and I would love to know what you want to hear more of on the podcast. If you have a topic in mind or a guest you’d like to hear from, head over to ElevatorCareers.net and drop a suggestion in the box or you can email podcast at ElevatorCareers.net. The link will also be in the description below. Thank you so much for being part of this conversation. Now back to the show.
Matt Allred (14:54)
So one thing I want to ask you about a little bit, I mean, it’s like your brother was talking about, you know, the recurring revenue and the structure, maybe even before a lot of others were seeing the importance of that. And I’m curious what you think he saw early that maybe the market just hadn’t responded to at the time.
Jessica (15:13)
Yeah, I mean, I think he definitely, you know, he understood what was attractive about the elevator business, right? The things that we hear PE kind of repeat over and over again, know, the recurring maintenance revenue that’s contract based, it’s an essential service, a fragmented market, right? He saw, you know, all of those things.
Matt Allred (15:21)
Mm-hmm.
Sure, they’ve learned the line now.
Jessica (15:41)
And, I don’t think those are necessarily new. for him, the timing just wasn’t just wasn’t right on the P side.
Matt Allred (15:49)
Do you think
it was the market? you maybe PE overall just didn’t kind of understand the value? What was it do you think that was kind of off?
Jessica (15:58)
Well,
yeah, I mean, I think, the timing for them now, just to say PE has been in the elevator industry for while, right?
There’s been, you know, going back to the early 2000s, there was a company, Jordan Industries, that bought a business long elevator that was then sold to Kone.
we think about Oracle’s transition, they were P backed early on and then they sold I think to groups. So PE interest is definitely not new in the industry. think kind of what is different and what wasn’t there
think the changes are private equity themselves. I think there’s more money there now, right? There’s more money in fewer deals, more willingness to look at different industries. And I think those investors are kind of catching to already know about the industry. There’s also now,
Matt Allred (16:44)
Okay. Okay.
Jessica (17:02)
a history of successful entries and exits, right? So other PE groups are looking at it like, oh, okay, so this is possible, it happens and folks money.
Matt Allred (17:07)
Sure. True.
Jessica (17:16)
So, you know, I think that’s the difference in timing, wasn’t, it just wasn’t there. I mean, there was some PE, but not like it is in…
That’s really what I think it is, a change in PE more so than a change in the elevator industry.
Matt Allred (17:30)
Sure,
And depending on what, 20 something years ago, I remember there was a lot of in houses and buying, so maybe a certain trend, right? When the market tanks, well then that money goes away and it starts looking elsewhere to invest. And so maybe it’s just a season as it were of where to invest.
Jessica (17:49)
It’s a season.
And, and, know, lot of the, the P groups that we, hear from,
they’re all kind of chasing the same investments. I, I’m not sure why that is necessarily, but you know, it’s like a, it’s roofing or it’s landscaping or it’s, know, um, or, and, elevators, think the one thing that we maybe have going for or against us, right, is that we’re still a small market compared, a small industry compared to a lot of others,
about roofing and how many houses there are, right? It’s a huge Or lawns, right? Lots of lawns to mow market, not a whole lot of elevators by comparison, right? So the industry is still a little small. The fragmentation in the market businesses that are just a little bit smaller than they’re willing to look at, I think in a lot of cases.
Matt Allred (18:38)
Okay.
Jessica (18:39)
But I mean, still, a PE interest. sellers are hearing from different groups almost daily. We hear from different groups almost daily to the point where,
you know, it’s hard to take a meeting from everybody because that’s kind of all you would be doing.
Matt Allred (18:55)
Yeah, yeah, One
thing that surprised me five, six years ago, you I started getting calls as a recruiter, right, but from investment firms. And it happened a couple of times and they were like, hey, you’re talking to a lot of these elevator people. Do you know anybody that wants to sell? I’m like, yeah, I don’t even ask that question, right? That’s just not even my, you know, I wouldn’t even think to ask that. But then they would say, well, you know, if you can bring somebody and they want to sell, you know, we’ll give you a cut. And I’m like, huh, that’s interesting.
So I did make a couple of calls and I got some, obviously people are gonna be tight lipped and they wouldn’t have told me anyway, right? But it was interesting to kind of see a few of them that I had asked about, right? Later sell and I’m sure they had relationships and kind of to my first impression, didn’t really belong there anyway. But it was interesting to me that would get phone calls like that. Hey, you know, help me find somebody to buy. I’m like, ⁓ okay.
Jessica (19:46)
Yeah.
Yeah, no, mean, and, you know, there’s all sorts of, finder firms too, that are working on behalf of these groups. And so, you know, we get, we see from sellers, you know, in the South or, you know, in the Northeast being targeted by businesses that are primarily in the South. And, you know, it’s kind of a blanket everybody that has
elevator in their name, right? And let’s see what comes out of it.
Matt Allred (20:13)
Yeah, yeah. And it really has
only happened in last few years. I mean, for the first 10 years or so that worked in elevator industry, I just didn’t hear anything about that. And then it seemed like it really kind of hit five, six years ago. So I guess, from your perspective, what actually makes a company attractive to a buyer, whether it’s PE or a major OEM, what is it that they’re really after?
Jessica (20:37)
Yeah, mean, just like, all investors in all industries, right? They are looking for, profitable businesses of a reasonable size that are easily transferable and provide limited amounts of risk to them, right?
Matt Allred (20:53)
So tell
me, what is it about the elevator industry businesses that fit that criteria? The limited risk, the easily transferable, all of that?
Jessica (21:01)
So it’s a lot of the things talked about, it’s the recurring revenue, ⁓ for maintenance contracts and it’s you know, additional revenue generated from those maintenance contracts, like repair and billable extras, right?
Matt Allred (21:12)
Mm-hmm, sure.
Jessica (21:14)
It’s the fact that those things are tied to long-term contracts, maintenance, and those things are, that are code mandated. Like those are all of the things that create kind of that
revenue, that decrease some of the other factors that you know, a buyer might look at when they’re thinking about like, you know, how am I going if I’m acquiring this business, how am I going to integrate it, right? They’re looking at more kind the operations side, what kind of systems are they using, If the owner let’s say, looking to retire,
Is there somebody else that’s to step up?
might focus more on, is
business a you know, potential platform? Versus is it an add-on, something I can scale? Strategics OEMs looking more like on geography, unit types, right? Is there
potential for modernization where they can put their equipment? But I think overall the foundation is the same.
Is the revenue and profit going to continue? Is this a business I can like easily acquire and integrate? And, are know, are there?
Matt Allred (22:23)
Right, right. Yeah, if you’ve got strong people and if you’ve got long-term contracts, then it’s certainly smooths transition because you’ve got years perhaps even build or upgrade the team before those contracts so that they’re gonna keep paying money. So yeah, I’m curious. mean, obviously you’re involved kind of end to end with acquisitions what does that process look like?
kind of behind the scenes most people would never see.
Jessica (22:51)
So, I mean, there’s definitely, there’s a lot more to it than just like find a buyer and agree on what the price is going to be. Right. I think sometimes I’m a little, little surprised when I hear folks kind of going it alone, right. Sellers selling without representation, because there are so many ways that you can get tripped That
Matt Allred (22:58)
Mm.
Jessica (23:14)
end up costing, money. ⁓
Matt Allred (23:17)
Well, I’m sure you’ve seen that, right? I imagine
you’ve kind of come in and, hey, we’ve been working on this deal for a while. We’re about to sign it, but we want you to look at it. And then you can say, ⁓ you know, if you were to fix this, this, this, you could sell it for twice as much or something like that.
Jessica (23:32)
Yeah, yeah, no, I’m definitely we, come across that, you know, there, there is a lot that happens, behind the scenes, getting the information together, due diligence is a big process in itself. You know, keeping the momentum going during diligence is a big thing that a lot of people Yeah.
Matt Allred (23:49)
Yeah, you’ve still got to fix elevators is what you’re telling me, right? You can’t just…
Jessica (23:54)
You’ve got to run the business responding to all of these data requests, right? And it’s a lot, and sometimes it helps to have somebody there helping the momentum going.
point also, I think it’s back to what we were talking about with trust, Jeff Eaton, who’s the…
the owner of Lyft Business Advisors, gave a presentation at the spring conference, right? He did the keynote address and he talked a lot about like mutual trust and that really, trust and honesty, that’s the key to getting deals done. Because like, if you think about it, can’t…
account for every single contingency, right? If you spent the time trying to build a purchase agreement around everything that could go wrong, you know, I don’t know that you would ever
done and you probably would spend most of your proceeds on legal, right? Which you don’t do. So, you know, it becomes like a leap of faith almost, right? ⁓ Both sides, you know, there’s, there’s gotta be enough trust there.
Matt Allred (24:50)
Yeah, yeah, yeah.
For sure, yeah.
Jessica (25:03)
in order to move forward because you can’t document, you can’t mitigate the risk through.
Matt Allred (25:06)
Yeah. Well, to your point,
right, you can do a bunch of due diligence, but at the end of the day, you have to do your best guess and say, yay or nay. You know, I trust this person, this organization, this company. I think it’s going to be a good thing or this just doesn’t feel right. And we’re going to have to walk away even though, you know, it be hard to do so. Yeah, yeah, that’s good point. So what would you say are the biggest drivers? What are the biggest, you know, when it comes to valuation?
And maybe what are the biggest mistakes that owners do that kind of hurts their value?
Jessica (25:38)
Yeah. So, so just like very generally, right? The value of the business is some multiple on the profitability. you know, the question is, what is the multiple? That’s, that’s really, you know, that’s, that’s where the, the value lies. You know, what’s the multiple, how long does it take the buyer to pay off the investment? So
Matt Allred (25:41)
Mm-hmm.
Jessica (25:58)
things that influence the multiple,
generally the size of the business, Bigger businesses tend to get a premium, And then all of the things talked about, the recurring revenue, maintenance contracts, all of those things, margins, and then certain like buyer factors, right? They wanna be in a market, there’s good synergy there, good management, things like that.
I guess mistakes, One business multiple does not apply to another business, right? So your story is about, know, so and so sold for, you know, 10 times. Okay, well, that could have been a huge business somewhere, right? That doesn’t necessarily mean that the 10 times multiple applies to your business. I think the second thing is,
Matt Allred (26:28)
Mm-hmm.
Sure. Yep.
Jessica (26:45)
you know, focusing solely on monthly maintenance revenue. I think historically, right, we’ve talked about businesses, valuation of businesses as a multiple on MMR, but the reality is the profitability is the most important part. If you think about it, like, you could have two businesses with, you know, $100,000 in monthly maintenance revenue, but maybe
One is focused on oil and grease contracts and they do a lot of extra billing that’s more profitable $100,000 in full maintenance where everything’s covered, right? So it’s the same MMR, but much different businesses, much different outcomes in terms of
focusing solely on MMR to value the business is, focus should really be on the profitability.
Matt Allred (27:37)
Sure,
sure. Yeah, I mean, if you’ve got costs that are eating up your margin, well then you really don’t have anything to sell.
Jessica (27:44)
right. If you’ve got a hundred thousand in maintenance, but you’ve sold it at, you know, 5 % margin, then not as valuable as somebody who is at, you know, let’s say 35 % margin. It’s just not the same.
Matt Allred (27:57)
Yeah, absolutely. Yeah. So I’ve got a couple of questions for you before we ⁓ wrap up. one is maybe someone’s listening and they’re saying, you know, this is a really interesting career path. How would you, break down, you know, actually getting into ⁓ &A certainly on the elevator stuff, but it’s such a small niche, right? I can’t see a person going to college and say, I’m going elevator &As. But what advice would you give in that regard?
Jessica (28:21)
Yeah. I mean, I I don’t think that it necessarily, be that difficult to get into on the elevator side. Like, feel free to give me a call if you think that you’re, be good at it. Right. But I do think
Matt Allred (28:30)
Right on.
Jessica (28:36)
be good at it, to be the best at it for the person selling their You’ve got to have kind of the operational, knowledge,
lot of times we’ll get questions from buyers on certain things and just having worked and having done that job, right? These are questions that I already know the answers to. I don’t need to go back and bother a seller who is trying to run the business at the same time. We have the answers. think it helps just
sellers kind of along the way. like we talked about, my path was a little bit unconventional, but the operational experience I think really, really helps in trying to make life easier for sellers. I mean, relationships also matter. I think the industry is small. It’s good to know folks.
Ask questions, talk to as many sellers as possible, but really understand the day-to-day realities folks.
Matt Allred (29:35)
Yeah, yeah, no, spoken. So last question for you. I mean, if there’s one message you could get in front of every elevator business owner listening, what would it be?
Jessica (29:44)
Okay, this one is start preparing earlier than you think you need to.
We don’t necessarily want to think about the end, right? But the reality is that the business will transfer,
right? We’re not going to be around forever. You’re not going to be able to run business forever. know, the business will transfer to someone. And if you wait until something happens, like, you’re burnt out, there’s family issues, whatever else that forces your decision to sell, then you’re not necessarily going to get the
best outcomes. most times the best outcomes come from years of focusing on, you know, improving the saleability and the transferability of the business. So things like making sure your financials are got contracts, right? You’ve got copies of your contracts, right? They’re all executed and valid. working on diversifying your customer base.
making sure got a good team. important part of this is that you know, the things that make a business more saleable or transferable are also the things that make the business more profitable in the meantime. So it’s like, it’s two for one right? Like you have better outcome
when you sell and a more profitable business in the meantime. And I think just planning in advance, making sure that you’re focused on the saleability, the elements that make the business more saleable also means that the end you have more options,
right? Which also makes the business more valuable.
PE deals and OEM deals, other strategic, maybe the employees by the business, if the is strong and it’s transferable, then you’ve got options and that helps also expand your value.
Matt Allred (31:38)
Yeah, very well said. What I’m hearing is, I think it was Stephen R. Covey that used to say, begin with the end in mind. There is going to be an end whether you pass away or whether you sell it or whether you give it to your kids or sell it to your employees. If you look that and kind of focus on having the healthiest business you can, it’ll be better off.
Jessica (31:57)
Yep, absolutely.
Matt Allred (31:59)
Well, Jessica, thank you for being with me today. I’ve enjoyed it. I appreciate your insights and wish you the very best as you continue to build your business.
Jessica (32:07)
Thank you, Matt. Appreciate it.
Matt Allred (32:09)
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